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2013

CONTRACT SURETY BONDS 101: The basics of bonding. 2013. What is a Surety Bond?. Principal. Obligee. Surety. Surety Bonds Mandated on Public Works. Federal Heard Act (1894) Miller Act (1935) State & Local “Little Miller Acts”. Types of Bonds. Bid Performance Payment.

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2013

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  1. CONTRACT SURETY BONDS 101:The basics of bonding 2013

  2. What is a Surety Bond? Principal Obligee Surety

  3. Surety Bonds Mandated on Public Works • Federal • Heard Act (1894) • Miller Act (1935) • State & Local • “Little Miller Acts”

  4. Types of Bonds • Bid • Performance • Payment

  5. Fundamentals of Surety Bonds

  6. Prequalification Process Attorneys Surety Company Contractor Lenders Producer Auditors Advisory Group Role of the Producer

  7. Prequalification Financial Statements Capacity Organization References Credit History

  8. Prequalification Financial Statements Capacity Organization References Credit History Banking Relationships

  9. Financial Statement Analysis OpinionPage BalanceSheet IncomeStatement AccountSchedules Cash FlowStatement FinancialStatement

  10. Financial Statement Analysis OpinionPage BalanceSheet IncomeStatement General &AdministrativeExpenses AccountSchedules Cash FlowStatement ManagementLetter ContractSchedules ExplanatoryNotes FinancialStatement

  11. Benefits of Bonds • Financial security • Construction assurance

  12. Functions of Bonds • Avoid liens • Create a smooth transition from construction financing topermanent financing • Provide support to contractor • Ensure project completion

  13. Cost of Surety Bonds

  14. For More Information Surety Information Office (SIO) www.sio.org | sio@sio.org SIO is a joint initiative of The Surety & Fidelity Association of America (SFAA) and National Association of Surety Bond Producers (NASBP).

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